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CEO personality traits, strategic flexibility, and firm dynamics

Aabo, Tom; Pantzalis, Christos; Park, Jung Chul; Trigeorgis, Lenos; Wulff, Jesper N.

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Tom Aabo

Christos Pantzalis

Jung Chul Park

Jesper N. Wulff


Reexamining CEO personality traits from a real options theory perspective, we suggest that the firm's strategic flexibility can be worsened by CEO conscientiousness and neuroticism. We use a measure of strategic flexibility as the firm's ability to take advantage of heightened volatility, which then results in superior stock returns. Our results suggest that strategic adaptability is impeded by rigid planning, resistance to change (conscientiousness) and lack of emotional stability (neuroticism). For firms that experience a decrease in volatility, the opposite holds. In line with trait activation theory, our results imply that the effect of specific CEO personality traits on firm dynamics and performance is contingent and context-specific. Our findings are economically significant and have important implications concerning CEO selection and management.


Aabo, T., Pantzalis, C., Park, J. C., Trigeorgis, L., & Wulff, J. N. (2024). CEO personality traits, strategic flexibility, and firm dynamics. Journal of Corporate Finance, 84, Article 102524.

Journal Article Type Article
Acceptance Date Dec 8, 2023
Online Publication Date Dec 13, 2023
Publication Date 2024-02
Deposit Date Jan 15, 2024
Publicly Available Date Jan 15, 2024
Journal Journal of Corporate Finance
Print ISSN 0929-1199
Publisher Elsevier
Peer Reviewed Peer Reviewed
Volume 84
Article Number 102524
Keywords Strategy and Management; Economics and Econometrics; Finance; Business and International Management
Public URL


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